Tesla's stock doesn't trade like it used to

Tesla CEO Elon Musk speaks before unveiling the Model Y at Tesla's design studio Thursday, March 14, 2019, in Hawthorne, Calif. The Model Y may be Tesla's most important product yet as it attempts to expand into the mainstream and generate enough cash to repay massive debts that threaten to topple the Palo Alto, Calif., company. ()
AP Photo/Jae C. Hong

Tesla has shifted from a stock that trades like an emerging-growth company to one that's sensitive to more fundamental catalysts, said Craig Irwin, an analyst at Roth Capital Partners.

Over the last year or so, Craig Irwin has taken notice of something happening incrementally with Tesla shares: they don't trade like they used to.

"We note a fundamental shift in the behavior of Tesla's stock," Irwin, an analyst at Roth Capital Partners, a Newport Beach, California-based investment-banking firm, wrote in a note to investors on Friday.

Irwin's comments came following Tesla's Model Y reveal at the company's design studio in Hawthorne, California, on Thursday evening.

"For the past several years Tesla's stock has behaved like an emerging growth company, where mgmt can invent their own milestones, meet these, and the stock would behave positively," Irwin wrote.

"Investors have now appropriately shifted focus to unit volumes, margins, and a practical assessment of the addressable market, in our view."

In other words, shares of the electric-car maker — known for trading in a volatile fashion over the last few years — appear to be moving more on fundamentals rather than the hope Tesla could meet its own ambitious, pioneering goals.

The shift Irwin has noticed in how the stock reacts to developments around the company has been more pronounced since the Model 3 production ramp-up in 2018, he told Markets Insider.

More broadly, Irwin thinks there is "clearly a large market" for the Model 3, and likely one for the Model Y. But he said the announcement seemed to fall short of more aggressive expectations, and vehicle prices seemed to be "too high."

The cheapest version of the Model Y is set to arrive in 2021, at a starting price of $39,000. Three more expensive versions of the vehicle will start at between $47,000 and $60,000, and are scheduled to begin shipping in 2020.